Today’s U.S. Energy Information Agency (EIA) report verified the downward direction of ethanol production and thus corn demand in the wake of COVID-19. Miles driven have fallen nearly in half and ethanol plant production is rapidly responding to that drop. This means that 2020/21 corn carryout stocks will at minimum be over 7 percent larger and likely much higher by the end. Today’s EIA numbers coupled with a realistic view of the weeks ahead suggest that last week’s USDA WASDE forecast of a 375-million bushel reduction in corn use for ethanol for the year is more likely only half the story. The stay-at-home order for many states is supposed to be lifted later this month but several states are extending it well into May; V...
From WPI Consulting
Weighing in on strategic realignment
WPI’s team was retained by the governing board of a U.S. industry organization to review a decision, reached by vote, to invest significant assets into the development and management of an export trading company. WPI’s team conducted a formal review of this decision and concluded that the current level of market saturation would limit the benefits of the investment. Based on WPI’s analysis and recommended actions, the board subsequently reversed its decision and undertook a strategic planning effort to identify more impactful investments. On behalf of numerous clients, WPI has not only assisted in identifying strategic paths but also advised their implementation.